Russell v Taxation Review Authority

IN THE COURT OF APPEAL OF NEW ZEALAND

CA235/00

BETWEEN	J G RUSSELL & ORS
Applicants

AND	TAXATION REVIEW AUTHORITY & ANOR
Respondents

Hearing:	18 February 2002
Coram:	Gault J Tipping J
Appearances:	G J Judd QC for Applicants A C Beck for Respondents
Judgment:	21 February 2002

JUDGMENT OF THE COURT DELIVERED BY GAULT J

The applicants seek conditional leave to appeal to the Privy Council from the judgment of this Court delivered on 26 November 2001. In that judgment the Court dismissed the appeal from the judgment of Fisher J in the High Court striking out one cause of action for judicial review of a decision of the Taxation Review Authority (TRA), ordering stays of applications for judicial review of decisions of the TRA in two other cases and striking out a claim in the equitable jurisdiction for an order for discovery in a matter before the TRA.
The present application is brought under para 2(b) of the 1910 Order in Council so that the applicants must show that:
[T]he question involved in the appeal is one which by reason of its great general or public importance, or otherwise, ought to be submitted to Her Majesty in Council for decision.
An applicant faces a formidable obstacle in seeking to show questions of law of great general or public importance that are sufficiently arguable to warrant being submitted to their Lordships when both the High Court and this Court have held that causes of action are so untenable to justify strike out.
There are similar difficulties with second appeals from the exercise of discretions, essentially on procedural matters, where no real prejudice has resulted.
The first cause of action which was struck out sought by way of judicial review to quash a decision of the TRA on the ground that there was a breach of natural justice in that the TRA did not hear evidence the applicant sought to adduce. The decision in issue has since been appealed unsuccessfully to the High Court and to this Court.
The decision to strike out the cause of action was upheld in this Court as constituting an abuse of process seeking to collaterally attack the appeal decision which was not appealed further and is now final.
For the applicants Mr Judd QC wishes to argue that the appeal decision was confined to the issues then raised and determined and should not preclude a new challenge on natural justice grounds. He submitted that this Court wrongly treated the earlier appeal decision as confirming that the relevant assessments were correctly made. He argued that the decision did no more than determine that the particular grounds of objection had not been made out. But, of course, s27 of the Income Tax Act 1976 (which is the relevant provision) then deems the assessments to be correct. Further, the approach of this Court now criticised is no different from that taken by the Privy Council in the closely related case of Miller v The Commissioner of Inland Revenue [2001] 3 NZLR 316, 331 (para 28).
The matter is a good deal more complicated because the evidence which was not called is allegedly relevant to the validity of the Commissioner’s assessments. They were upheld on appeal. Separately a proceeding for judicial review of the assessment process was taken unsuccessfully as far as the Privy Council in Miller v The Commissioner. Indirectly the applicants seek to obtain further evidence so as to re-litigate in respect of the same process. The true objective is to secure a decision from the TRA, by reference to the unheard evidence, that the Commissioner was improperly motivated; that there were no true assessments made. Having challenged the correctness of the assessments as far as this Court, it is an odd stance to now seek to show that they were never made.
The point of law of general or public importance said to arise is whether judicial review is necessarily precluded once the challenged decision has been unsuccessfully appealed. However, the judgment to which the present application relates did not determine that question. The Court merely determined that in the circumstances of this case the cause of action constitutes a collateral attack on the earlier appeal decision and is an abuse of process. That is the very line of attack rejected by the Privy Council in Miller:
In any case, Their Lordships think that the proof of the pudding is in the eating. It would be very strange if an assessment which has been held valid by the authority and the Courts should be invalidated on the ground that the Commissioner’s officers did not give sufficient thought to whether it was valid or not. So this point also turns out to be an attack on the correctness of the assessment dressed up as a process argument.
We are not persuaded that there is a tenable argument on any point of law of sufficient importance to justify leave to appeal against the striking out of this cause of action.
The applicants also seek to appeal further against an order staying two other causes of action. They are claims for orders by way of judicial review of decisions of the TRA on challenges to separate assessments. Fisher J held, as is accepted by the applicants, that the grounds advanced for review can be taken in appeals which have been or will be brought. He cited Fraser v Robertson [1991] 3 NZLR 257, a decision of this Court affirming (p260) the general proposition that where there is a right of appeal, judicial review will be refused (s4(1) Judicature Amendment Act 1972 notwithstanding) when the remedy of appeal is more appropriate.
The present matter represented an application of that principle in the circumstances. This Court upheld that decision and said:
We are satisfied that this was a decision well open to Fisher J in the exercise of his discretion, with which we would not interfere. If it emerges that there is any matter which cannot be suitably encompassed in the appeals, the High Court can be asked to consider lifting the stay to that limited extent.
Mr Judd submitted that the judgment must be taken as adopting a new principle, that where there is a right of appeal judicial review proceedings cannot be brought. We do not accept that. If it were so the causes of action would have been struck out not merely stayed.
We have not been persuaded that this was other than the exercise of a well established discretion. It raises no question of law of importance and leave to appeal further is not appropriate.
The final matter for which conditional leave is sought is the refusal by this Court to interfere with the order of Fisher J striking out another cause of action seeking an order from the High Court in its equitable jurisdiction that the Commissioner give discovery in proceedings before the TRA.
Fisher J held that in the absence of any reason why the already adequate powers of the TRA to provide any necessary remedy should not be invoked, it is unnecessary to resort to the rarely used auxiliary equitable remedy. He was also critical of the “diffuse and obscure nature of the complaint”. This Court agreed, saying that the discretion to grant equitable discovery could only have been exercised against the applicants.
It was submitted that there is raised an important principle of a litigant having the right where there is jurisdiction to have a claim considered on the merits rather than having the claim struck out without the opportunity to make out the grounds for the remedy sought. But striking out on the ground that a cause of action cannot succeed is not a novel principle and its application in particular circumstances raises no question of general or public importance.
Mr Judd submitted that for the purposes of strike out the allegations in the statement of claim must be taken as capable of proof and he referred to the allegations that the TRA is unable or unwilling to grant the remedy sought. The criticism of lack of particularisation was not responded to on appeal with proposed amendments. That this Court did not see any prospects of the claim succeeding does not give rise to any significant question of law.
Accordingly, we are not satisfied that any ground has been made out for the grant of conditional leave. There are no questions of law meeting the requirements of the rule. It is strictly unnecessary therefore to go on to consider the point raised by the applicant concerning the composition of the Court from which they wish to appeal. It was said that, because prior to the hearing of the appeal there had been raised the question of whether Blanchard J should be a member of the Court for the appeal, the fact that he sat on the appeal should be weighed in the exercise of the discretion under r2(b) whether to grant leave.
The objection (if it could be put as high as that) rested on the fact that on an earlier occasion Blanchard J made a decision, in an interlocutory matter, adverse to the applicants (or some of them) when sitting in the High Court. His decision did not relate to the credibility of any litigant or witness. The view he expressed was reversed on appeal, but when the matter went to trial and the evidence was reviewed the view Blanchard J had taken prevailed. Ultimately that view was upheld in the Privy Council.
We see the fact that Blanchard J was a member of the Court as adding nothing to the case for conditional leave.
The application is dismissed.
The respondents are entitled to costs which we fix at $3,000 together with disbursements approved, if necessary, by the Registrar.

Solicitors
R J Warburton, Auckland, for Applicants
Crown Law Office, Wellington

[2002] NZCA 44

21 February 2002